The government has decided to allow candidates from private sector banks to apply for top leadership positions (like Managing Director or CEO) in public sector banks (PSBs). United Forum of Bank Unions (UFBU) which represents most bank employees is strongly opposing this move.
Why Are Bank Unions Protesting?
Bank Unions are protesting because of the following reasons:
- Bank Unions see this decision as a step toward privatizing public sector banks, even if indirectly. They see it as “executive privatisation” — done through policy, not Parliament.
- Public banks were nationalised to serve the public interest, not to run like private companies and hiring private-sector executives could shift the focus from public service to profit-making.
- The unions believe this decision violates existing laws or constitutional provisions and the change was made by the government without changing the actual laws that govern these banks and institutions. Laws like the SBI Act, LIC Act, and Banking Companies Act clearly say that top appointments must be made within a public-sector framework, with oversight from Parliament and regulatory bodies like the RBI.
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Laws like the SBI Act, LIC Act, and Banking Companies Act clearly say that top appointments must be made within a public-sector framework, with oversight from Parliament and regulatory bodies like the RBI. The unions argue that making such changes without amending the laws is legally wrong.
The unions want the government to pause or suspend the new rules. In the past, even bringing in IAS officers from outside didn’t work well. The unions believe outsiders often don’t understand banking the way insiders do.